Landlords today have more options than ever to monetize their properties beyond the traditional long-term residential lease. Everyone knows about Airbnb and the potential benefits (and risks, as we’ve seen recently due to COVID-19), but far fewer landlords are familiar with another option to actively increase rental income – corporate housing.
What is Corporate Housing?
Corporate housing refers to a category of rentals in which corporations place employees on a temporary basis to provide a better living experience than a hotel, at a lower cost.
For example, if a company wants to send a corporate employee on a project that lasts a few months, say to supervise a subsidiary based in another city, they may choose to place that person in corporate housing over a hotel.
Not only would such a rental be cheaper than a hotel, which charges high nightly rates, it is also a more comfortable option for the employee given the extended stay period.
Other situations in which corporate housing is needed include employees visiting corporate headquarters for training purposes, construction crews working a remote project, temporary housing for displaced families covered by insurance companies, and relocating employees who are given temporary corporate housing until they can find permanent housing.
Why Should You Rent Your Property as Corporate Housing?
Since you will be competing with the relatively expensive nightly rates of a hotel, renting your property as corporate housing gives you the opportunity to generate significantly higher rental income than a traditional rental.
For example, a one-room hotel renting for $150 per night equates to monthly rent of $4500. Pricing a one-bedroom corporate apartment for $3000 is very lucrative in areas with $150 nightly hotel rates and still results in significant savings for the corporation.
What Type of Properties Can be Rented as Corporate Housing?
The type of property used for corporate housing should match the corporate client’s needs. Since corporate housing caters to a wide variety of jobs, it spans a wide range of needs, which means that almost any type of property can be converted with the right opportunity.
The needs of a construction crew, who’s employer might be fine with room-sharing, will be vastly different than that of a highly paid executive and their family.
If you are considering turning your property into corporate housing, consider the existing condition of the property (does it have any amenities?), location (is it close to corporate headquarters, metropolitan centers, construction sites?), and size, against the demand for corporate housing in your area.
Corporate Housing Commonalities
As you would expect, the higher rental income does come with a higher cost. In addition to spending more of your time and actively managing the rentals, you will have to incur some added costs to start and maintain the operation.
Regardless of the type of property, there are a few aspects of corporate housing that are shared. Since you will be catering to temporary tenants from out of town, the experience must be more similar to a hotel:
- Furnished – all corporate housing must be furnished. The type of furniture depends on the type of property and who you cater to. Choose higher-end furniture for luxury corporate housing and more durable options for blue-collar properties.
- Service – similar to a hotel, you should offer regular cleaning, laundry, dry cleaning, and other concierge services.
- Meet a standard – your corporate housing must meet the corporation’s standards for quality. This means keeping furniture and interior updated and providing excellent service.
- Online presence – in order to convey the quality of your corporate housing and establish trust with corporate clients, it’s important to have a high-quality, clean website complete with photos and descriptions.
- Billing – to make it easier on your clients, lump all of their expenses into one bill. Adding a digital experience for paying rent online will also go a long way towards establishing credibility.
Deciding how to design your complete offering and the specifics will depend on the type of corporate client you are going after.
If you are catering to luxury guests, for example, you might consider equipping the living room with a large flat-screen television and fully stocking the kitchen and bar with high-quality food and beverage items.
How to Find Corporate Housing Clients
This is an exercise that we recommend doing before deciding to convert your property to corporate housing as it will give you an idea of the demand and potential income in your area.
The manual approach – contact large corporate offices around your rental property (especially corporate headquarter) and network with the Human Resources department, as they are typically in charge of corporate housing.
Ask about their current needs, what they typically require, how much they pay, and who they currently use.
Not only will this provide you with information to determine the attractiveness of corporate housing in your area, but you will also be talking to your potential clients for if-and-when you do decide to go for it.
Next – the online approach. Conduct a quick Google search for “corporate housing near [enter location of your rental]” and take a look at the top results, as these will be your potential competition.
From large corporate housing landlords to corporate housing aggregators, to traditional rental listing websites, you will find it all.
Examine the availability and pricing of similar properties in your area and use this additional information in your analysis. If you do decide to go for it, you will have a better understanding of where to market your corporate rentals online to find new clients.
One important thing to note – providing excellent service will go a long way, as corporate clients tend to repeat and will also make their opinions known publicly if they are dissatisfied, impacting your ability to generate new clients. So now that you know how to rent your property as corporate housing, go out there and make that extra income!